COVID-19 pandemic: This release was compiled during the COVID-19 pandemic.
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Consumer Prices in December, as measured by the CPI, remained unchanged during the month. This compares to an increase of 0.1% recorded in December of last year. The most significant monthly price changes were increases in Transport (+0.6%) and Health (+0.6%). There were decreases in Alcoholic Beverages & Tobacco (-0.7%) and Clothing & Footwear (-0.7%).

Contributions to the overall CPI – annual change

Table 17 shows the contribution of each 2-digit COICOP1 division to the overall change in the CPI. A detailed breakdown of the individual components of each of the 12 COICOP divisions is presented in Tables 4 to 15.

The divisions which caused the largest upward contribution to the CPI in the year were Restaurants & Hotels (+0.41%), Alcoholic Beverages & Tobacco (+0.31%), Education (+0.12%) and Housing, Water, Electricity, Gas & Other Fuels (+0.10%).

The divisions which caused the largest downward contribution to the CPI in the year were Clothing & Footwear (-0.20%), Furnishings, Household Equipment & Routine Household Maintenance (-0.18%), Transport (-0.15%) and Food & Non-Alcoholic Beverages (-0.13%).

Alcoholic Beverages & Tobacco rose due to higher prices for alcohol sold in off licences and supermarkets and higher tobacco prices.

Education increased primarily due to a rise in third level education costs.

Housing, Water, Electricity, Gas & Other Fuels rose mainly due to higher rents and an increase in the cost of electricity and solid fuels, which was partially offset by lower mortgage interest repayments.

Transport increased mainly due to a rise in airfares, bus fares, rail fares and higher petrol and diesel prices.

Restaurants & Hotels rose mainly due to an increase in the price of hotel accommodation and food served in restaurants, cafés etc.

Housing, Water, Electricity, Gas & Other Fuels decreased mainly due to lower mortgage interest repayments, which was partially offset by higher rents and an increase in the cost of home heating oil.

Recreation & Culture fell mainly due to decreases in the cost of games, toys and hobbies.

Alcoholic Beverages & Tobacco decreased due to lower prices for alcohol sold in off licences and supermarkets.

Clothing & Footwear fell mainly due to sales.

CPI sub-indices

The annual rate of inflation for Services was 2.0% in the year to December, while Goods decreased by 1.9%. Services, excluding mortgage interest repayments, increased by 3.0% in the year since December 2012.

The CPI excluding tobacco for December remained unchanged in the month and rose by 0.1% in the year. The CPI excluding energy products fell by 0.1% in the month and increased by 0.5% in the year. The CPI excluding mortgage interest increased by 0.1% in the month and was up by 0.7% in the year.

Harmonised Index of Consumer Prices

Prices on average, as measured by the HICP, increased by 0.4% compared with December 2012.

This analysis compares the annual average rates of inflation for 2013 with the annual average rates of inflation for previous years.

The annual average rate of inflation in 2013 was 0.5%. This compares to a rate of 1.7% for 2012 and 2.6% for 2011. The largest annual price rises for the year were recorded in January 2013 and February 2013, when prices on average rose by 1.2% and 1.1% compared to the previous January and February respectively.

Largest rises recorded in Alcoholic Beverages & Tobacco and Education

Of the twelve COICOP divisions, six showed higher annual average inflation rates for 2013 than was the case in 2012 with six showing a lower rate of inflation.

During 2013, mortgage interest repayments fell on average by 7.1% compared to a drop of 8.4% in 2012. The price of Goods decreased on average by 0.9% while the price of Services (which includes mortgage interest) rose by 1.7%. During 2012, the price of Goods increased on average by 1.2% while the price of Services rose by 2.0%.

Education shows the largest price increase since 2009

Over the period 2009 to 2013, the largest increase in prices was for Education (+21.4%), Miscellaneous Goods & Services (+15.0%) and Housing, Water, Electricity, Gas & Other Fuels (+12.6%). The largest decreases were for Clothing & Footwear (-13.9%), Furnishings, Household Equipment & Routine Household Maintenance (-11.8%) and Recreation & Culture (-3.7%). The overall increase in the Consumer Price Index over this period was 3.8%.

HICP

Prices on average, as measured by the HICP rose by 0.5% in 2013 compared to an increase of 2.0% in 2012.

1Classification of Individual Consumption by Purpose Adapted to the Needs of Harmonised Indices of Consumer Prices (2000).

Background Notes

Consumer Price Index

Definition

The Consumer Price Index is designed to measure the change in the average level of prices (inclusive of all indirect taxes) paid for consumer goods and services by all private and institutional households in the country and by foreign tourists holidaying in Ireland.

Consumer Price Index (CPI)

Approximately 53,000 prices are collected for a representative basket consisting of 632 item headings in a fixed panel of retail and service outlets throughout the country during the week containing the second Tuesday of each month up to and including the third Tuesday of each month. The dates to which the December index relates are Monday 9th to Tuesday, 17th December 2013.

Scope of the Index

Population Coverage: All private and institutional households in the State and the expenditure of foreign tourists within Ireland. It does not include the expenditure of other non private households. Expenditure which occurs abroad by Irish residents is also excluded. In statistical terms coverage is referred to as the domestic concept.

Geographic Coverage: Covers the whole of the Republic of Ireland. Pricing takes place in 84 locations (cities and towns) throughout the country. These sampling points are located in Dublin city and county, the four regional cities of Cork, Limerick, Galway and Waterford, approx. 80% of towns with a population of 10,000 and over, approx. 70% of towns between 5,000 and 9,999 and a smaller proportion below this threshold. The results are weighted to represent the distribution of the population and its related consumer expenditure.

Item Coverage: All goods and services bought by the reference population for the purposes of consumption are included in the index. Expenditure on capital assets and investments, gambling and certain other activities are however excluded. There are 632 item headings and 12 division headings based on the COICOP classification. With each rebase the coverage of goods and services is reviewed to ensure that it continues to be representative of consumer tastes and purchasing practices.

Price Collection

Personal visits are made to retail outlets by some 80 price collectors on a monthly basis. Approximately 50,000 price quotations are gathered in this way. In addition, 126 special inquiries covering items such as utility charges and services are conducted by post, telephone and e-mail in conjunction with internet price collection. Most prices are collected monthly, some quarterly and others annually. The CSO supplies general specifications to price collectors and price collectors are free initially to select a brand and in certain cases, size. This allows for a wide variety of different brands of the same item to be priced throughout the country. Once selected, the same item/brand is priced on a monthly basis in order to ensure matched price quotations. If an item disappears, substitution can occur but that price is excluded until matched prices are available for the same comparable item for two consecutive months. The CSO wishes to put on record its appreciation of the co-operation and assistance it receives from retail outlets and other business concerns.

Classification

The classification used in the CPI is based on a version of the Classification of Individual Consumption by Purpose Adapted to the Needs of Harmonised Indices of Consumer Prices (2000) (COICOP). This replaced the former national classification which was used up to December 2001. The COICOP classification breaks consumer expenditure into twelve different divisions covering a comprehensive range of consumer goods and services.

Annual Update of CPI Weights

For 2013, the CPI COICOP class (4-digit) level weights were updated with a reference period of December 2012. The weights were based primarily on the 2011 National Accounts Household Final Monetary Consumption Expenditure (HFMCE) data. The expenditure data were price updated at CPI COICOP class level to December 2012 using the price movement of the corresponding CPI COICOP class indices.

The sample of items in the basket, retail outlets and service providers and locations remains unchanged from the December 2011 rebase.

CPI Item Weights

The CPI measures in index form the monthly changes in the cost of purchasing a fixed representative ‘basket’ of consumer goods and services (i.e. Laspeyres formula). Identical items are priced in the same outlet on each occasion so that changes in the cost of this constant basket reflect only pure price changes. The current basket of goods and services consists of 632 representative items which were selected as part of the December 2011 rebase and remain unchanged for 2013. The representative share of each item in the basket is proportional to the average amount purchased by all households in the State and foreign tourists in Ireland based primarily on the 2009/2010 Household Budget Survey (HBS) and estimates of expenditure by foreign tourists across a range of consumer goods and services. When the new COICOP class (4-digit) level weights were introduced with the January 2013 index, the CPI item weights were also updated. The CPI item weights were calculated on a pro rata basis using proportions from the December 2011 rebase.

Methodological Details

A full methodological description of the new series is available in the Consumer Price Index Introduction of Updated Series (Base: December 2011 = 100) which is published on the CSO website at:

The European Union-Harmonised Indices of Consumer Prices (EU-HICP) is calculated in each Member State of the EU. The purpose of this index is to allow the comparison of consumer price trends in the different Member States.

Comparison with CPI

The methodology now adopted for the construction of the national CPI is identical to that recommended for the HICP. Thus the two indices only differ in respect of the coverage of certain goods and services and the treatment of insurance. The current EU reference base period (Year 2005=100) is however retained for ease of comparison with other EU countries.

Excluded Items

The following items, constituting approximately 8.5% of the Irish CPI expenditure weighting, are excluded from the HICP:

mortgage interest

building materials

motor car tax

motor cycle tax

motor car insurance (non-service)

contents insurance (non-service)

dwelling insurance

union subscriptions

Annual Update of HICP Weights

For 2013, the CPI COICOP class (4-digit) level weights were updated with a reference period of December 2012. The weights were based primarily on the 2011 HFMCE data. The expenditure data were price updated at HICP COICOP class level to December 2012 using the price movement of the corresponding HICP COICOP class indices.

The sample of items in the basket, retail outlets and service providers and locations remains unchanged from the December 2011 rebase.

Monetary Union Index of Consumer Prices (MUICP)

Euro area inflation is measured by the MUICP (‘Monetary Union Index of Consumer Prices’ as defined in Council Regulation (EC) No 2494/95 of 23 October 1995) which is the official euro area aggregate. The MUICP is calculated as a weighted average of HICPs of the 18 countries in the euro area. Country weights are computed every year reflecting the country’s share of the household final monetary consumption expenditure in the euro area total.

Classification System

The coverage of the indices is based on the international classification system, Classification of Individual Consumption by Purpose Adapted to the Needs of Harmonised Indices of Consumer Prices (2000) (COICOP).

COICOP

Prior to the introduction of the December 2001 based series in January 2002 the CPI used a national classification while the EU Harmonised Indices of Consumer Prices (HICP) used COICOP. To ensure greater comparability CPI and the HICP have both used the COICOP since December 2001.

The COICOP classification is based on 12 divisions:

01 Food and Non Alcoholic Beverages

Includes food and non alcoholic beverages purchased in supermarkets, small shops, speciality shops and petrol station forecourt outlets. It excludes meals out which are covered under 11 Restaurants and Hotels.

02 Alcoholic Beverages and Tobacco

Includes alcoholic beverages purchased in off licences and supermarkets but excludes alcohol consumed on or within licensed premises which is classified under 11 Restaurants and Hotels. It also includes tobacco products.

03 Clothing and Footwear

Mens, ladies and childrens clothing and footwear, sports and leisurewear and services such as laundry and dry cleaning, shoe repair, dress hire and alteration.

Covers household items such as furniture, carpets and other floor coverings, household textiles and soft furnishings, household appliances and other household items such as utensils, tools, garden equipment and non-durable items for cleaning, washing and other day to day household activity. Also included are services such as electrical repair, cleaning and gardening.

06 Health

Includes medical products, appliances and equipment, hospital charges and out patient services supplied by doctors, dentists, opticians, physiotherapists and practitioners of alternative and complimentary medicine.

07 Transport

Includes the purchase of new and second hand vehicles, spare parts, car maintenance, fuels and lubricants, public transport and services such as parking, motor association subscriptions, car wash, toll charges, driving lessons, driving test, driving licence and car hire.

08 Communications

Postal and telecommunications services.

09 Recreation and Culture

Includes items such as audio visual and photographic equipment, computers, music and DVDs, sports and recreation goods, games and toys, items connected with gardening and pets, recreational, sporting and cultural activities and events, newspapers and other reading material, package holidays and other items connected with recreation and culture.

10 Education

Includes pre-primary and primary, secondary, third level fees and other education and training such as night courses and examination fees.

11 Restaurants and Hotels

Includes meals in restaurants and hotels, fast food and takeaways, cafes and canteens; alcohol consumed on or within a licensed premises and accommodation services supplied by hotels, guesthouses and hostels.

12 Miscellaneous Goods and Services

Covers a wide range of items including hairdressing and other grooming; goods for hygiene, hair and body care; personal goods such as jewellery, handbags and wallets; childcare and other social protection services; insurance, financial services and other services including funerals, weddings, legal and professional services. The household charge was added to this division, in the CPI, under the item 'miscellaneous goods and services' in April 2012. The household charge is not included in the HICP.

Calculating percentage changes in the index

The movement of the CPI, HICP and their subindices are expressed as percentage changes, rather than changes in index points, because index point changes are affected by the level of the index in relation to its base period, whereas percentage changes are not. The example below illustrates the computation of index point and percentage changes.

Index point change

Current index

106.7

Less previous index

103.7

Equals index point change

3.0

Percentage change

Index point change

3.0

Divided by the previous index

103.7

Equals

0.0289

Result multiplied by 100

0.0289 x 100

Equals percentage change

2.9

Estimating Contributions

A contribution represents the amount of the overall percentage change in the All Items CPI which is accounted for by any given category. It can be estimated for any category in the CPI (e.g. the twelve COICOP 2-digit divisions) and for any period of time.

Data Required:

Base weight for the category for which you wish to estimate the contribution.

Current index for the category in question (same base period).

Previous index for the category in question (same base period).

All Items CPI for the previous period in question (i.e. the start period).

Example:

To estimate the contribution of Food & Non-Alcoholic Beverages (COICOP 01) to the overall annual percentage change in the CPI up to July 2006 you would need the following data

1

Base weight for COICOP 01 (base:December 2001=100)

14.092%

2

Current Index (i.e. July 2006) for COICOP 01

103.7

3

Previous Index (i.e. July 2005) for COICOP 01

102.1

4

All Items CPI for the previous period (i.e. July 2005)

111.3

Steps in the calculation

Step 1

Multiply the base weight by the current index

14.092 x 103.7

Equals (1)

1461.3404

Step 2

Multiply the base weight by the previous index

14.092 x 102.1

Equals (2)

1438.7932

Step 3

Subtract figure (2) from figure (1)

1461.3404 - 1438.7932

Equals (3)

22.5472

Step 4

Divide figure (3) by the All Items CPI for the previous period

22.5472 / 111.3

Equals Contribution

0.20

Therefore your estimated contribution of Food & Non-Alcoholic Beverages to the percentage change in the CPI for the year to July 2006 is 0.20. The actual published figure was 0.19. The difference is due to the fact that actual published contributions are calculated using data to more decimal places.

It is more complicated to estimate contributions where more than one base period is involved, as the base weights will have changed (e.g. to estimate a contribution for the period January 2000 to January 2005 involves the November 1996=100 base and the December 2001=100 base). For assistance in this regard please contact the CPI section.

Data Dissemination on www.cso.ie

The CSO website (www.cso.ie) now holds a range of CPI data. Within the Consumer Prices section of the website (accessed via the ‘Prices’ link on the homepage), a range of principle statistics are held including overall annual percentage changes from 1977 to date, All Items CPI annual figures from 1996 to date and COICOP division monthly and annual figures from 2002 to date.

Further data can be accessed at www.cso.ie by clicking on ‘Databases’ and ‘Statbank CSO Main Data Dissemination Service’. The subject area is ‘Economy’, ‘Prices’, ‘Consumer Prices’ and ‘Consumer Prices - Annual Series’ or ‘Consumer Prices - Monthly Series’. The website is updated each month at 11am on the CPI publication day.

The Database Direct for the CPI contains monthly and annual index numbers and percentage changes for the following categories and time periods:

Category

Period

All Items CPI

1975 to date

12 COICOP Divisions

1975 to date

Special CPI Subindices (CPI excluding Tobacco, Energy Products, etc)

1982 to date

Harmonised Indices of Consumer Prices (HICP)

1997 to date

In addition, the following data can also be accessed within Database Direct.

Monthly index numbers and annual percentage changes for the Constant Tax Price Index from January 1997 to December 2006.

National average prices for selected CPI goods and services from January 1997 to date.

All Items CPI numbers for various base periods from 1922 to date.

Detailed sub-indices are available from 2003 to date.

Any queries relating to the usage of the web dissemination database for CPI data should be directed to cpi@cso.ie